From rags to riches. From feast to famine. From pauper to prince. We’ve all heard the phrases to describe going from one extreme condition to the opposite. But farmers in North Carolina understand this concept first hand. Unfortunately.

In 2011, just about every imaginable weather disaster hit the state. It started with frigid cold, moved on to a sweltering heat wave, interspersed with a historic tornado outbreak and then hurricane flooding.

In 2012, started out with much of the state experiencing a severe drought, but thankfully Mother Nature eventually dealt a kinder hand to farmers in the Tar Heel state than most of the rest of the county, who experienced the worst drought since the Dust Bowl.

This unending rollercoaster of weather extremes underscores the reason why year after year, farmers across the country happily purchase crop insurance to help mitigate the unknowns that are never far from hand. In the past, disasters like these would have triggered large disaster relief bills, much like what was passed after…

By Andrew Bowman

Aug. 2, 2013-From walking on soil baked into near-concrete during the worst drought in over 50 years in 2012, to dredging across flooded fields this soggy spring, farmers continue to face uncertainty. And that’s just weather. As a 27-year-old farmer, I’m starting to wonder what “normal” even means.

In my short career, corn prices have been under $2 and over $8 per bushel, land prices have nearly tripled since I purchased my first field, more regulations point to greater expense without offsetting revenue, and farm policy has evolved from focusing on price supports and direct payments toward a more market-oriented risk management tool called crop insurance, a public-private partnership whereby farmers purchase policies and only receive a payment if there is a documented loss. Given our new “normal” characterized by volatility everywhere-in weather, markets and regulation-farmers would struggle without access to crop insurance, a vital tool for rural America and the new face of farm policy.

The farm bill, which will guide American agriculture for the next five years, is currently being debated in Congress. Current farm bill proposals eliminate direct payments, which are cash subsidies based on historical price figures. Price support mechanisms still exist, but are much reduced-corn and soybean price supports as proposed in the House are 72 percent and 75 percent of the 2008-2012 Olympic Average Price, respectively, and the Senate version is even lower at 55 percent for both crops. These programs are less necessary because crop insurance has assumed the role as the primary risk management tool for farmers.

Crop insurance saves taxpayers’ money. When disasters struck in the past, recovery was paid for completely by taxpayers. And that doesn’t include the other trade-distorting supply controls and price support policies enacted in response to farm crises. Last year, in contrast, when farmers here in Illinois were decimated by drought, we had crop insurance and didn’t need a disaster bill to help us plant this year.

It is a vast improvement over the price support system and direct payments of the past. Farmers must put “skin in the game.” Many even complain about the money lost over the years purchasing crop insurance. Moreover, we lose a hefty deductible-15 percent minimum-before any claims are paid out. Last year, this deductible was $12.7 billion. Coupled with $4.1 billion in premiums paid last year, farmers lost or paid nearly $17 billion before crop insurance kicked in. It’s a major expense for us, but one we’re happy to pay for because it gives us something this new “normal” rarely allows: peace of mind. From the federal government’s perspective, it may be a liability, but the public-private partnership means taxpayers and farmers also shoulder the rewards in the form of underwriting gains during good years. In fact, from 2001-2010, the government saw $3.99 billion in gains.

And the benefits extend to rural communities. The average American farmer is 58, the oldest at any time in our history. Assuming most retire at 65, we are seven years from real problems if we don’t start transitioning to the next generation. Crop insurance helps young farmers because it serves as “stop-loss” collateral to back credit-a crucial transition tool given the high capital costs of farming. In this sense, it is a bridge to the future for America’s farmers.

Crop insurance also supports farmers’ working capital, allowing cash to flow back into the economy. Farmers in other countries need to stockpile a large share of their profits into cash reserves planning for a bad year so they have sufficient liquidity when disaster strikes. Because American farmers have crop insurance, they don’t need enormous cash reserves and can instead reinvest profits. I have paid down debt and invested in newer, more sustainable technologies faster because crop insurance covered the risk…

By Tom Zacharias, National Crop Insurance Services

Admittedly, opponents of farm policy attract more headlines than the men and women who put food on our tables and clothes on our backs.

Then again, it is far easier to get attention with sensationalist claims and unsubstantiated data.

Take the drought of 2012 for example. Opponents of crop insurance made news by claiming that taxpayers would be responsible for as much as $40 billion. Critics called crop insurance a farmer bailout and said things like farmers were “laughing all the way to the bank” and were “praying for drought, not praying for rain.”

Never were these anti-agriculture activists and for-hire university economists criticized for their bombastic tone or baseless predictions that turned out to be incredibly inaccurate.

Sure, farmers tried to set the record straight, but supporting a farm policy that helped protect taxpayer dollars is not as glamorous as inflated estimates and inflammatory rhetoric.

Now, crop insurance opponents are at it again as Congress prepares to negotiate a farm bill. Farmers have been accused of “taking bribes.” Farmers even have been compared to cheap drunks at an open bar and told to pay their fair share.

Use of such language and misleading information…

By Bill Bridgeforth

It is hard to talk about the state of Alabama without mentioning agriculture. Alabama boasts more than 48,000 farms, covering roughly 28 percent of the state.

But being a farmer in the Deep South – given our weather patterns – is like owning an unpredictable dog. One day it loves you, the next day, it bites you.

In farming, when that dog decides to bite you, it comes in the form of powerful thunderstorms, hurricanes or droughts. That’s why for every year of the last thirty-five years that I’ve farmed, I purchase crop insurance. In fact, I can’t even conceive of farming without crop insurance.

In the past, when large-scale natural disasters hit farmers, Congress was immediately pressured to pass expensive, ad hoc disaster bills that were completely paid for by the public. Such disaster bills, while appreciated by farmers, took up to a year or more to arrive. But farmers need money in hand quickly after disaster strikes, because they must start planning, and purchasing inputs, for the next season.

That’s the beauty of crop insurance. First of all, taxpayers aren’t stuck footing the whole bill if and when disaster strikes. Crop insurance is purchased by each individual farmer, tailored specifically to the crops grown, the land the farm sits on and the farmer’s tolerance for risk.

Crop insurance isn’t cheap by any stretch of the imagination. The policies I purchase cost several hundred thousand dollars a year. But I consider that just a cost of production, because if disaster strikes, I can expect my crop insurance indemnity in about a month or less, not the years it takes for federal help to arrive. Those months saved can mean the difference between success and failure in farming.

Farmers across the country spent $4.1 billion purchasing crop insurance policies in 2012. The policies purchased insured 271 million acres, or roughly 86 percent of all planted cropland in the U.S.

But farmers aren’t the only group that has come to love crop insurance. Bankers love it too. That’s because when farmers approach bankers for production loans, bankers regard a crop insurance policy as a form of collateral. Additionally, bankers know that a farmer who has paid his own money for a crop insurance policy is a farmer who has risk management in mind.

Of course like any other public policy, crop insurance has its enemies. Some of those groups used last year’s historic drought to not only criticize the availability of crop insurance, but to also attack the character of farmers like me, who purchase it. One group said that farmers were “praying for drought, not rain,” implying that farmers would get rich from their crop insurance policies.

I was one of those farmers who suffered from the drought last year and let me set the record straight: We do everything we can to have the highest production possible every year. We select a good variety of seed, purchase the best fertilizer and do everything we can to protect the crop. If there ever were any farmers trying to live off of crop insurance, they’re long gone. The cost of production is just too high.

But if America is going to continue to enjoy its plentiful and affordable food supply, the country must also focus on helping the next generation of farmers to gain their footing and learn the trade. To that end, I am a founding member and Chairman of the National Black Growers Council, which serves as a network for black men and women who are involved in agriculture. Our mission is to improve the viability and profitability of the black row crop farmers, and to develop black talent for the next generation of farmers.

To that next generation of farmers who is seeking my advice, one of the first things I’d tell them is to make sure crop insurance is a line item in your annual budget. Because all of the best farming practices in the world aren’t going to stop Mother Nature from raining on your parade, at least every now and then.

Bill Bridgeforth farms corn, cotton, soybeans and canola and lives in Tanner, Alabama.

There is a huge story playing out right before our very eyes this year in agriculture that nearly everyone is missing: Despite the fact that this nation has faced two of the worst farming years in decades – with devastating drought in the Southern Plains and flooding in the Midwest in 2011, and widespread drought over major corn and soybean growing regions in 2012 – there has not been a single call for an ad hoc disaster bill from America’s crop farmers.

And why no calls for disaster assistance from crop farmers? Because 86 percent of planted farmland in 2012 was protected by crop insurance, the best risk management tool available to farmers. Before crop insurance was widely available, natural disasters like we have just experienced would have triggered a very costly, unbudgeted ad hoc disaster bill. Forty-two such emergency disaster bills in agriculture have cost taxpayers $70 billion since 1989, according to the Congressional Research Service.

Crop insurance was designed by Congress to largely replace the need for ad hoc disaster legislation, thereby helping to shelter taxpayers from the full costs of agricultural disasters and avoiding the need to enact new disaster assistance following every major farm disaster, such as was recently experienced…

Corn, cotton, sorghum, spring wheat rates revised too

* USDA will phase in changes to cushion drought impact

* Agency expects little impact on 2013 planting decisions

WASHINGTON, Nov 28 (Reuters) – The U.S. government has ordered crop insurers to charge lower premiums to soybean growers for the second year in a row as part of rate revisions for six major crops, even as many farmers collect on claims following this year’s severe drought.

The changes are part of an Agriculture Department project to improve the actuarial soundness of the crop insurance program, which is federally subsidized but privately run.

Lenders often require insurance or other collateral to be pledged by farmers to assure repayment of farm operating loans. USDA pays 62 cents of each $1 in premiums, which totaled $11 billion this year.

USDA’s Risk Management Agency on Wednesday said that the revised rates are not expected to affect planting decisions among various crops in 2013.

The new rates will be phased in “to limit year-to-year premium changes and potential increases due to losses experienced in 2012 as a result of drought,” the agency said.

Indemnities for crop losses could hit a record $20 billion this year following the worst drought in half a century, analysts say, double the mark set in 2011. So far, $6.3 billion has been paid out on insurance policies.

Overall, premiums for soybeans will fall by 6 percent and for rice by 8 percent for 2013 crops while the premium for spring-planted wheat will rise by 4 percent.

Corn, cotton and grain sorghum premiums will decline in the core growing states for those crops but will rise in outlying states. The same pattern applies to soybeans,…

As Illinois farmers, our biggest concerns regarding the whims of Mother Nature are late spring freezes, heavy spring rains that delay planting, wind, hail, and possibly flood damage.

But this year, we’re in a whole other ballgame. We live in a part of the state that is affectionately known as “Little Egypt,” which could be quite appropriate given the fact that our climate seems more like the Sahara Dessert than the Midwest.

The entire state finds itself in a drought, with all but five counties in a state of “severe, extreme or exceptional” drought. To put that in perspective, a good part of our state is a foot or more below average on rainfall this year. And about 66 percent of our entire corn crop is currently in poor or very poor condition.

It’s times like these that farmers who purchase crop insurance will be able to sleep at night. That’s because crop insurance was designed by Congress for years like this, as a tool to move some of the risk of America’s farm sector from the taxpayers to the private sector.

The same farmers who faced record flooding last year are facing severe drought this year, which underscores the need for effective risk management tools in agriculture. The Sept. 2 article “Highest cost of drought falls on taxpayers” misses the reasons why crop insurance has gained such broad public and political support.

Farmers purchase crop insurance as a way to shelter themselves from the whims of nature. Most Iowa farmers purchase crop insurance yearly, but rarely collect indemnities. For example, in 2011, Iowa farmers spent $444 million of their money to purchase 124,000 crop insurance policies, of which only 15,000 were indemnified.

The crop insurance system saves taxpayers money. It has all but eliminated the historical response to agricultural disasters, which was 42 supplemental ad hoc disaster bills — measures that cost taxpayers

$70 billion since 1989, according to the Congressional Research Service. And spending on farm programs has gone down substantially over the last few years, roughly 36 percent, as crop insurance use has risen.

Unfortunately, the Environmental Working Group is critical of crop insurance and was quoted that “farmers are praying for drought, not rain” this year. The statement shows a lack of understanding of how crop insurance works and a callous attitude toward the American farmer.

Americans are accustomed to a bountiful food supply that remains affordable. This is possible only through stability and reinvestment in agriculture by America’s farmers and ranchers. For most of them, crop insurance is the best risk management tool, or only such tool, available.

Steve Hamilton, Oakland, Iowa

Although the rains from Hurricane Isaac brought relief to some, the portion of the lower 48 states still experiencing moderate to exceptional drought increased to 64%, up one percent from last week, according to the September 11 U.S. Drought Monitor.  In 42%of those states, the drought conditions are considered “severe, extreme or exceptional.” In addition, 54%of the country was in moderate drought or worse.

The majority of the country’s corn and soybean acres are affected, and while it’s too early to predict the full extent of agricultural damage, based on weather data, the losses will likely be greater than 2011 and could rival the flood losses of 1993. Some think losses could be as great as the 1988 drought, but it is still too soon to make that determination.

Despite the rains from Hurricane Isaac, most of the continental U.S. remains parched, with 63% of the lower 48 states still experiencing moderate to exceptional drought, according to the September 4 U.S. Drought Monitor. In 42%of those states, the drought conditions are considered “severe, extreme or exceptional.” In addition, 53% of the country was in moderate drought or worse.

The majority of the country’s corn and soybean acres are affected, and while it’s too early to predict the full extent of agricultural damage, based on weather data, the losses will likely be greater than 2011 and could rival the flood losses of 1993. Some think losses could be as great as the 1988 drought, but it is still too soon to make that determination.